Wind tariffs at a low of Rs. 3.46 per unit

Sat 25 Feb 2017

Renewable push:Low tariffs may be a problem for developers as they have to ensure low cost.AFP

Wind power tariffs closed at Rs. 3.46 per kWh in India's first-ever auction for wind energy projects as the country aims to tap renewable energy to overcome its power shortages.

The bid was called by government-owned Solar Energy Corporation of India for 1 GW of wind capacity.

Mytrah Energy

Mytrah Energy, Green Infra, Inox and Ostro Energy each won the rights to set up 250 MW of wind capacity in a location of their choice and to sell the energy generated to state-run Power Trading Corporation. Sources say that the two states under consideration for these projects are Tamil Nadu and Gujarat.

Such low tariffs in wind energy come on the back of historically low solar tariffs achieved in a recent auction of a total capacity of 750 MW.

The reverse auction completed in Rewa in Madhya Pradesh saw solar tariffs fall to Rs. 2.97 per unit and Rs. 3.3 per unit when levelised over the 25-year power purchase agreement period.

“The level of participation in the recent solar and wind auctions points to the coming of age of the industry,” Vikram Kailas, MD & CEO of Mytrah Energy, one of the bid winners, said.

‘Hard-fought auction’

“The auctions have been hard fought and have led to tighter pricing than one would have foreseen even a few months earlier. This speaks to the growing confidence of the players in their ability to deliver projects on terms that are globally competitive. Ultimately, this will pave the way for the secular growth of the Indian renewable energy sector.”

“After solar cost reduction below Rs. 3 per unit, wind power cost down to Rs. 3.46 per unit through transparent auction. A green future awaits India,” Minister of New and Renewable Energy Piyush Goyal tweeted following the auction, which started on Thursday and was completed on Friday.

However low tariffs could prove to be a problem for developers since the focus will now have to shift to ensuring low costs. “Prima facie, the viability would depend on the plant load factors, capital costs, and getting long-term debt at competitive rates,” Girish Kadam, vice president at ICRA said.

“The choice of location is with the bidder so that they can choose to locate the project where there is enough wind resource.”

“Wind is a gift to mankind by environment & the historic low cost of Rs. 3.46 per unit wind power shows our commitment to leverage clean energy,” Mr. Goyal said in a subsequent tweet.